The Lion, the Witch and the Wardrobe – a.k.a the Investor, the Government and the Community

Investor Relations:

By all accounts, Starbucks appears to be doing everything right when it comes to investor relations. The company comes across as extremely transparent, posting important information in a variety of different places and formats, most notably their Webcasts & Presentations.

The site also includes sections for Recent Financial and News Announcements; a complete list of the firms currently providing research coverage on Starbucks; financial Annual Reports dating back to 1999 (there is a separate Social Responsibility report); a list of their Board of Directors and Senior Officers; governance principles, committee charters and policies; an up-to-date Event Calendar that highlights upcoming conference calls and other scheduled announcements and presentations; Financial Highlights including Reconciliations, Store Counts, and Supplemental Data; First Call Estimates; 21 different Investor Frequently Asked Questions; SEC Filings; Stock Information; there is even a section that responds to recent rumors about Starbucks.

My only criticism of the site is that there is so much information. While I don’t think this is necessarily a bad thing, it would be nice to have a page that provides the main facts and figures – just the highlights so that I don’t need to click through all of the different sections to find what I need. They do have an Overview page, which I think was intended for this, however, I don’t think it is used most effectively. Having such a page would certainly help in a crisis. I would suspect that a great deal of the information within the investor relations section does not need to be updated more than a few times a year. Using the Overview page more effectively would enable them to highlight the most recent and news worthy information for regular visitors to gather.

Government Relations:

Of course a company as large as Starbucks could not exist without ever having to deal with the government. Given the locations that Starbucks grows and purchases beans from, they must deal with governments on a daily basis.

According to OpenSecrets.org, Starbucks does direct funds toward lobbying for the food and beverage industry. In my opinion it is quite low in comparison to many other companies of its size - $460,000 (2011), $730,000 (2010), $530,000 (2009), and $638,000 (2008).

However, what I found more interesting than the above, is Starbucks’ and Howard Schultz’s most recent “political” campaign.

This past fall Schultz wrote in an open letter, “ I asked fellow business leaders to join me in urging the President and the Congress to put an end to partisan gridlock and, in its place, to set in motion an upward spiral of confidence…First, to withhold political campaign contributions until a transparent, comprehensive, bipartisan debt-and-deficit package is reached that honestly, and fairly, sets America on a path to long-term financial health and security. Second, to do all we can to break the cycle of economic uncertainty that grips our country by committing to accelerate investment in jobs and hiring.”

When so many people cow-tail to the government in order to stay in favor, I think it is extremely gutsy for a company and CEO of his caliber to stand up and speak out publicly on such a sensitive issue.

Corporate Social Responsibility:

Visit the Starbucks site to see how you can mane a difference

As with Investor Relations, Starbucks’ Corporate Social Responsibility (CSR) relations is impressive. In fact, there is simply too much to talk about in this short blog. However, an entire sub-section of their website is dedicated to their five pillars - Community Involvement, Ethical Sourcing, Environmental Stewardship, Wellness and Diversity - for anyone who is interested in learning more. The site allows you to learn more about the different initiatives, read their Shared Values blog, review their progress toward set goals, and how you can make a difference.

Because most of their corporate controversy has centered around their social responsibility, specifically the way they acquire their beans and treat local farmers, I would suggest that they link their section on rumors to this page so that readers can quickly learn Starbucks’ “side of the story”. I would also recommend adding this section to their Facebook page, as people are more likely to visit this than the corporate website. This would also allow them to post accurate information quickly in the event of a crisis.

Being able to communicate accurate information as quickly as possible, on many different forums and in a variety of ways is most important in today’s technological age.  

A Love Hate Relationship

The votes are in. People love Starbucks – and hate it. There are more blogs by and about Starbucks then I would ever have guessed.

Unofficial blogs range from the general, such as Starbucks Melody, who just has a passion for coffee, and Starbucks Drama who gabs about the “goings-on” inside a Starbucks store.

To the specific, such as Unspoken who posts recipes for many of Starbucks’ beverages.

To the international, such as Starbucks In Japan who, surprisingly, blogs about what’s new at Starbucks in Japan, and Bucked by the Star who posts only photos taken inside Japanese stores.

Not my cup, but my name - this should read "Kelly"

To the utterly wacky, such as Pat’s Papers who, in addition to non-Starbucks related content, has dedicated a section to the misspelled names written on the side of the cups, to Starbucks Everywhere, which is the personal blog of a guy on an adventure to visit ALL company-operated Starbucks (he’s visited over 10,000 to date!).

Then there are those written by Starbucks employees, such as Starbucks Dave. Dave describes the blog as a “place to talk about the company I love.” He is also quick to tell his readers that its “not an official Starbucks website.”

Finally, but not completely, there is Starbucks Gossip: Monitoring America’s Favorite Drug Dealer, which, as you can gather from the title, focuses on the, shall we say, less positive side of Starbucks.

There’s not much that employees and fans alike are not blogging about. Of course I have not had the pleasure of speaking with anyone from headquarters, but my guess is they are very pleased with the (online) interaction that customers and employees are having with their company. These bogs are directly inline with their image of “community”.

With all of these unofficial blogs, one would think that Starbucks would not need to have one of their own. Not true. Starbucks itself has four official blogs (that I was able to locate).

There is the main Starbucks Blog, the Shared Values Blog, and two Starbucks Partner Page’s (one for American employees and one for non-USA staff).

Surprisingly, since Starbuck’s is generally very consistent with their branding and messaging, the main Starbucks blog seems to be centered on corporate activities and company products (including their other divisions). The Shared Values blog focuses on their social responsibility around the world. Again, all about what they are doing at headquarters.

I would have expected a blog that talks more about their customers and their connection with the company. I suppose since there are so many unofficial blogs focusing on this content, that it is their job to cover what is missing. (This is where I need to remind my readers that Starbucks has “My Starbucks Ideas”, which, while not a blog, is an online portal for customers to submit their own ideas for the company to implement.)

I do appreciate that both blogs appear to be written by a variety of Starbucks staff members rather than one un-named employee, which is consistent with their philosophy that their employees as “partners” rather than just “staff”.

I was pleased to see that the company does host two internal blogs specifically for staff (partners) only.  Since these two blogs are password protected its hard to say what the topics cover, however, I would hope that they offer content such as advance release of corporate news, tips and techniques for staff, and opportunities for online training and professional development.

“Care more than others think wise. Dream more than others think practical. Expect more than others think possible.” Howard Schultz

Other than CEO Howard Schultz, who is the public face of Starbucks, there is no official spokesperson.

Lindsay Lohan enjoying a smoke and a Starbucks

There are however, countless “promoters” of Starbucks coffee. In fact, it’s hard not to pick up an entertainment magazine these days without seeing a celebrity walking around toting a Starbucks cup in one hand and a dog-in-a-purse in the other.

Unfortunately for Starbucks, not all would be the ideal spokesperson.

If Starbucks were to choose someone to represent their company it would have to be someone who is also environmentally and socially responsible, since this is Starbucks’ image.  I think to name someone who simply likes coffee would be a huge mistake and go against one of Starbucks’ main principles – Expect More Than Coffee. 

40 years and counting

Last week I briefly mentioned that Starbucks released a new logo this year. Below is a short video of CEO, Howard Schultz, discussing its evolution.

To be or not to be? Why choose?

I have to admit, I am not always the most observant person, so it should come as no surprise that when asked to comment on Starbucks traditional media relations activities my reaction was, “what activities?” I simply cannot recall hearing about Starbucks on the radio, ever seeing a TV commercial or even passing by posters or signs on the street.

Thank God for Google.

A quick search of  “Starbucks and Traditional Media Relations” brought me into a whole new world.

I quickly learned (and was not all that surprised to discover), that in 2008, Starbucks was named one of the worst brands in social media. Now I know you’re thinking, social media is not traditional media relations. I’m getting there.

That was the light bulb for Starbucks. By 2009, the coffee company had more than 5 million fans on Facebook and nearly 500,000 followers on Twitter, making it the 3rd highest rated brand in social media. As of today, they have over 26 million Facebook fans and almost 2 million Twitter followers.

So what does this have to do with traditional media relations, you continue to ask? Well, for Starbucks the two are inseparable. Through one, the other becomes stronger.

In 2009, Starbucks launched a $28 million ad campaign to compete with McDonald’s who was promoting its new line of McCafé coffee drinks.

The Starbucks campaign consisted of advertising posters being placed in six major cities. Wow right. $28 million for some posters in a few cities across the US. I want that account. But in actuality, this was just the beginning; and where my above tangent comes into play.

Following the placement of these posters, Starbucks challenged people to track down the posters and be the first to post a photo of one using Twitter. The campaign eventually included newspapers and magazines, and YouTube videos, but the goal was to use (limited) traditional print media to create an unlimited viral campaign promoting Starbucks coffee across multiple mediums.

“The idea for the Starbucks photo contest came from watching what people already do on Facebook and Twitter”, said Chris Bruzzo, vice president for brand, content and online at Starbucks. “Each year, people race to post the first photos of Starbucks shops decorated in red for the holidays”, he said, “It shows a level of connection to our brand that we wouldn’t have concocted on our own,” Bruzzo said.

And it worked.

Generally speaking, Starbucks prefers new forms of media relations. “Starbucks’ social media presence gave it an advantage over competitors with gigantic ad budgets because its fans wanted to talk about it online…It’s the difference between launching with many millions of dollars versus millions of fans.” Said Bruzzo.

As another example of how the company is mixing traditional with new media relations, on the Saturday before the presidential election, Starbucks sponsored a 60-second television commercial on “Saturday Night Live” advertising free coffee on Election Day. The video was then posted online. By the following Tuesday, the video was the fourth-most-viewed video on YouTube, and people were mentioning Starbucks on Twitter every eight seconds.

The video was brilliant. Not only did it drive people into their stores, but it also matched their brand perfectly. Like the print ads mentioned above, the backdrop for the video was a paper/burlap-esque texture, similar to a traditional coffee sac. In addition the video was all about community, one of Starbucks most important principles. The video reminded its viewers that Starbucks cares about the communities in which they are located (both in this country, across the pond and in the fields where the beans are grown). The time slot chosen is even more brilliant. At the time, Tina Fey’s impersonation of Sarah Palin made the show one of the most watched and talked about. Starbucks connection to the show and the political content was seamless.

Recently, the company launched a new logo and with that came additional promotion. The company, which sponsors Morning Joe on MSNBC, is now promoting a new bag of coffee featuring the news show’s name, and in keeping with their philanthropic image, the bag includes a $5 donation card to DonorsChoose.org allowing customers to donate directly to a school classroom project of their choice. Another brilliant strategy. The money does not go to the company’s foundation where they get to choose – they’ve given the choice back to their customer to keep the money in their community.

 

In closing, I believe that Starbucks is doing a brilliant job of combining traditional and new forms of media relations to effectively promote their business (their online news center on their corporate website is one of the best and most intuitive sites I have ever seen). I think it’s effective because they have clearly thought about who their audience is and how they are interacting with the company, and presenting everything that comes out of their door with a consistent look and message. It makes me wish I lived closer and could be a part of this incredible movement.

Virtual Community

My last few posts have focused on Starbucks as a community. So it makes complete sense that Starbucks has also built up an online community through site such as Facebook, Twitter, LinkedIn, YouTube, Foursquare, Flickr, MySpace, Bebo, Digg and Tumblr.

In addition, Starbucks also has a corporate blog, a Wikipedia page and an iPhone app (which, incidentally, was the first app I downloaded when I turned on my new iPhone 4S).

It’s safe to say that they have covered their bases and are meeting a variety of needs, including community/customer engagement through Facebook and Foursquare, customer service through Twitter, and PR through their blog, YouTube and even their Wikipedia page.

All seem to be the standard ‘We Heart Starbucks’, given that, for the most part, content is driven by them. The exception is Twitter. I guess that is the downside to using such an open forum to hang your dirty laundry. But if this is what the people want…and these days it seems to be what the people want – a quicker, easier, more public way of complaining about poor service. And Starbucks seems more than happy to help address dissatisfaction though this means.

So far, these are your average, run-of-the-mill web 2.0 platforms.

My favorite Starbucks web presence, however, is probably one of the most unique - My Starbucks Idea.  Think about it. What do people want more than anything else these days? To have a voice and to be heard. Have an idea for a new drink? Want to suggest a community service project? This is the place to post it. And once left, you can check the status of “ideas in action”. What a better way to engage your customers and make them feel that their ideas really do matter. The only down side is that you do need to register for an account. While I understand why Starbucks requires this, it would be even more inclusive and user-friendly if you could choose to leave an idea as a “guest”, or access it through your Facebook or Twitter account, which is becoming more and more common these days.  

Overall I think that Starbucks does a great job of building an online community to match the community that it strives to build each day in real life. “A haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.”

Now if they could just simplify their website. With well over 100 pages (I gave up counting after 170), one could get lost looking for what brought them there and leave before they find it.

Our Neighborhood

“Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.” 

This is the 5^th principle that Starbucks stands behind. So it is no real surprise (to me anyway) that the coffee chain has chosen to team up with Opportunity Finance Network® (OFN) to help create and sustain jobs.

The goal of their “Create Jobs for USA” campaign is to bring people and communities together to create and sustain jobs throughout America.

Talking the Talk and Walking the Walk:

Some may see this as a marketing ploy, and it may be. Regardless, in this case, Starbucks is not just taking credit for their customer’s contributions. To kick off the Create Jobs for USA program, the Starbucks Foundation contributed $5 million.

Starting on November 1, public donations will be accepted at company-operated U.S. Starbucks stores and online at createjobsforUSA.org. For donations of $5 or more, donors will receive an American-made “Indivisible” wristband.

The so-called "Starbucks Experience"

Coffee shops are a dime a dozen these days – found on every street corner, college campus, and gas station. So how in a country where coffee is all but dripping from the tap, is Starbuck’s unique?

Well it’s not…really. This is why over the past few years Starbucks and its CEO, Howard Schultz, have been introducing different ideas to stand out from the crowd.

In 2008 7,100 stores closed for three hours to re-train its staff.

"Over the years we kind of lost our way," said Schultz. The intention of this training, he said, was to “energize its 135,000 employees and provide some barista re-education in the ‘art of espresso’.” 

In 2010, Starbucks began offering free Wi-Fi to its customers, with no registration or account required and no time limit.  

Now in 2011 Starbucks is launching the Starbucks Digital Network (in Partnership with Yahoo!). 

All of this is done with the goal of making Starbucks your choice for the third place - place where you’ll walk in and feel at home (because your barista knows your name and your usual drink), where you can plug in and log on for free.

Do you buy it? 

PR executive, Kenneth D. Makovsky (not connected with Starbucks as far as I could tell) does. “Further, think about the transparency of the strategy from a customer vantage point and the support it likely engendered from many quarters. Most of the time management in similar situations does not publicly acknowledge the problem and would conduct such training sessions in secret. In this case, the president openly announced that things were not what they should be and needed to be improved.” 

Well maybe I am cynical, or maybe I have just settled comfortably into the readings for CS502, but I think this particular example (barista re-education) lacks a bit of authenticity and has a slight smell of gimmick. I mean, what better way to get positive PR and reinvigorate some of your lukewarm customers? The truth is, Starbucks is a company like all others – it employs human beings, and human beings sometimes screw up, regardless of how much training and re-training they receive.

I’m not the only one that doesn’t quite buy it.

There is a lot of chatter online these days about Starbucks lack of follow-through on their “third place” philosophy. The company promotes free Wi-Fi with no time limit. However, what’s happening on the ground is not quite the same.

Many customers in large markets such as NYC have been complaining that stores are blocking the power outlets to cut back on Wi-Fi freeloaders. So basically, you can access free Wi-Fi with no time limit imposed by Starbucks, just by the life of your battery. 

I’m not sure this is the sort of Word of Mouth PR that Starbucks was hoping to garner from their latest ploy; but the people shan’t be stopped! The beauty of the internet – a soapbox to stand on. And thanks to Starbucks themselves, it’s a free soapbox to stand on.

Starbucks. Expect More Than Coffee.

Starbucks.  Expect More Than Coffee.

I probably spend $10-$20 per week on coffee, and not just any coffee, Starbuck’s coffee. I just love coffee and Starbuck’s make’s it so easy. A couple years ago I was given a Starbuck’s gift card for Christmas, and rather than toss it once depleted, I just continued to add to it. $20 here, $40 there. It is just so much easier than scrounging in my purse for cash. Maybe a little too easy.

But not only do I love their coffee, I love their stores, their image and what they stand for.

"To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time."

Doesn't that just make you feel warm and fuzzy inside? Think about it - you've had a long night, a restless sleep, you wake up and what is the first thing you reach for? Well for me, it's coffee. A beautiful, rich, dark cup of coffee. It warms my soul, my human spirit.  One sip and I am a whole new woman. 

(I feel somewhat validated that this was their intention all along. ;) Just kidding.)

But truthfully, their mission statement really says it all – they focus on the coffee, the individual and the community. 

While Starbuck’s is without a doubt a multi-national corporation (that sells more than just coffee), they continue to remind their customers that they too were once the “coffee shop on the corner”, and it is their goal to continue to treat their customers as though they still are. 

In their corporate principles they use words such as “neighborhood gathering place” and “community”, “human connection” and “belonging”. Employees are encouraged to get to know their customer’s names and remember their “usual”. Community events listed on their bulletin board are indeed that, community events. Not some big national drive run by the head office. [Individual --> Connection <-- Neighborhood]. All intended to make the customer feel as though they are walking into their local mom & pop coffee shop. 

Now I know Starbuck’s has endured their share of controversy over the years, but they have spent a great deal of time (and money) combating this controversy and creating a new image. (For the fifth year in a row, Ethisphere Magazine has named Starbucks to the list of the World’s Most Ethical Companies).

Recently the company changed its logo and re-branded all of their products as green – literally and figuratively. Their color of choice is green but their image is also all about being environmentally friendly (and all that this implies).

As a coffee addict lover, I would say that there are two types of coffee drinkers in this world: those who know good coffee and those who think Dunkin Donuts is good coffee (that’s a whole other blog!). Starbuck’s certainly does have a reputation as expensive coffee. Frankly, I am not sure Starbuck’s is concerned with dispelling this myth. Starbuck’s concern is with quality, not quantity and therefore their target audience is people who are interested in how good the cup of coffee is (and how it makes them feel), rather than how much it costs.